This Friday, the shopping phenomenon that is Black Friday comes round once again, with retailers across the world slashing prices in an attempt to encourage people to spend in the run-up to Christmas. Originally a US term – it comes the day after Thanksgiving – it was introduced to the UK by Amazon and is now a highly anticipated event over here. Shoppers are predicted to spend £2.6bn, or £1.8m per minute and, at a time when consumer spending has been falling as wage growth fails to keep pace with the rate of inflation, retailers will be hoping for a much-needed boost.
That the concept was bought to the UK by the world’s largest online retailer speaks volumes about the consumer migration from the physical store to online services, taking advantage of increasingly sophisticated e-commerce strategies. Plans have just been unveiled to pedestrianise Oxford Street by next Christmas, transforming it into a boulevard to match the shopping districts in Paris or New York. The plans are designed to address concerns about the rising number of traffic accidents and pollution, but the draw of a new shopping district to tourists and domestic shoppers alike is clear. The changes will also coincide with the launch of the Elizabeth Line, and more pedestrians means more business.
In the long-term, retailers will need more than a festive spending spree, and not all can afford physical stores in prime locations like Oxford Street. Last week saw the debut of two new exchange-traded funds (ETFs) that bet on the demise of traditional retailers, taking positions against retailers most likely to suffer from the rise of online shopping. That said, it’s not the end of bricks and mortar and the right mix of experiential and online operations can actually keep retail property on the front foot. Footfall is expected to dip year on year this Friday, but assuming the end of traditional retail set-up is a simplistic view. In reality, the online world is more crowded than ever and it’s the larger retailers with bigger budgets which appear on the first page of search results. For that reason, a mix of physical and virtual has to be the best route to market. This year has seen the launch of Amazon Go stores in the US, which are due to arrive in the UK soon. If you can’t beat ‘em, join ‘em.